Like other residential communities in the Las Vegas area, Mountain’s Edge is feeling the ill effects of a market whose unemployment rate and foreclosures currently lead the nation. But Mountain’s Edge, a 3,500-acre master-planned community that opened in the southern Las Vegas suburb of Enterprise, Nev., in 2004, has managed to retain its cachet among home buyers and builders as a desired place to live and build. Its attractive location and lifestyle marketing continue to give this community a competitive advantage, even over the other eight Vegas-area master plans that its developer Focus Property Group has created.
Bill Boschetto, Focus’ director of disposition, tells BUILDER that Mountain’s Edge is on track this year to close about 650 homes. While that number would lag its closings in 2007 and 2008 (1,740 and 879, respectively, according to Robert Charles Lesser & Co., which ranked Mountain’s Edge the country’s No. 1 master plan those two years), it would be a noticeable improvement over the 596 homes whose sales closed in the community in 2009.
More to the point, says Boschetto, Mountain’s Edge “continues to be the hottest spot in the Valley” for land acquisitions. Recent deals, he says, include PulteGroup’s purchase of 35 acres within the community for $165,000 per acre; KB Home and Ryland Homes jointly purchased 70 acres for $135,000 per acre; and Lennar acquired 20 acres for $203,000 and picked other home sites within the community from Warmington Homes.
There are currently 16 active builders at Mountain’s Edge, and several of them have been “scrambling,” says Boschetto, to secure land within the community before it runs out. Right now, Mountain’s Edge has available 95 acres that were once controlled by Woodside Homes; 80 acres controlled by the investment management firm Angelo Gordon & Co.; several 2,500-square-foot lots in the possession of the Federal Deposit Insurance Corp. “so who knows what’s going to happen to them,” says Boschetto; and another 30 acres.
About 7,500 of the planned 14,500 homes at Mountain’s Edge have been completed. Last month, Lennar received preliminary approval to build 238 single-family homes in a 20-acre neighborhood in Mountain’s Edge called Jasmine Falls. That approval rested on Lennar’s agreeing to revise its earlier plans to build condos and triplexes on that site. Boschetto believes that Mountain’s Edge has endured Las Vegas’ economic travails partly because of its “synergies,” meaning that its product and lifestyle diversity are in sync with what buyers are looking for today. Homes in this community range from around $160,000 to $350,000, with $200,000 being the sweet spot. (Most of the homes at Mountain’s Edge are single-family, although there are some townhouses and a scattering of rental apartments.)
To illustrate his point, Boschetto notes that Harmony Homes had been selling 3,000-square-foot houses on 15,000- to 20,000-square-foot lots at its Rivendell neighborhood, which closed out this year. Conversely, Pardee Homes is enjoying healthy buyer interest in its two neighborhoods, Serrano (whose homes range from 1,850 to 2,589 square feet on 4,675-square-foot lots and start in the low $200s); and Rosetta (which range from 1,444 to 1,881 square feet on 3,278-square-foot lots and from $158,950 to $188,450). Both neighborhoods feature energy-efficient homes under Pardee’s LivingSmart brand.
The majority of Mountain Edge’s customers these days are first-time home buyers, says Jason Thompson, a Focus associate who is also vice president of the Mountain’s Edge Homeowner Association. But Boschetto adds that second-time move-up buyers are also showing up at the community’s sales offices. They both agree that having the right product mix is critical to any community’s success right now.
Thompson is one of five board members of Mountain’s Edge’s HOA, which includes two owners. (When this community is 75% completed, Focus will transfer the HOA board over to its homeowners exclusively.) The HOA plays a pivotal role in preserving home values in the community by maintaining houses that have been foreclosed on until they find new buyers. “The rate of foreclosure in Las Vegas is now something like 12%, and our foreclosures have been typical of other local master plans, but they haven’t become such a problem that they are destroying our neighborhoods,” says Thompson.
Mountain’s Edge promotes itself as a kind of new frontier for the modern age, with more than 500 acres devoted to open space, parks, and trails. (It breaks ground this month on its 20-acre Nathaniel Jones Park, which should be completed by the fall of 2011.) And the community takes what Thompson calls a “two-pronged approach” to providing that lifestyle for its residents. The HOA, for example, has its own budget for four to six events per year that revolve around major holidays such as Thanksgiving. It also provides a series of classes and workshops that have included tips on xeriscaping and desert gardening.
The community’s property manager, Capital Consultants Management Corporation, has a lifestyle employee, too. And there’s a marketing co-op, funded by the communities’ builders, that sponsors larger events such as a 5-kilometer race to support the American Heart Association, which drew more than 5,000 people on Oct. 16.
Mountain’s Edge has another seven to 10 years before it’s completely built out, estimates Thompson and Boschetto. And Focus isn’t in any rush to open a new community. “We’re looking very carefully,” says Boschetto. “The problem is underwriting deals right now, because there’s no real residual value” in developing land as finished lots to sell to builders. He says Focus has investors waiting in the wings to help fund new projects. But it’s unlikely that Focus will be buying land aggressively again until Las Vegas’ economy shows sustained signs of recovery. “We’re watching right now.”
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Las Vegas, NV.